Independent Loan Information

The following is a list of common real estate fees and what they are.

Deed recording fees

These fees pay for the county clerk to record the deed and mortgage and change the billing information for property taxes. These fees are usually around $50, but they do vary by area.

Attorney fees

Both you and your lender will have attorney fees that you will typically have to pay. This fee covers costs for the attorney to draw up the documents and assure that everything is set up as it should be. Your own closing attorney will represent your interests and may be present at, or may facilitate, the closing itself. The closing attorney collects all fees, transfers the deed to the buyer, pays outstanding taxes and utility bills, pays himself and all other closing fees, and gives all remaining money to the seller. The attorney fees may range from $500 to $1,000 or more, depending on the purchase price of the property and the complexity of the sale.

Document preparation fee

This fee may be included in the application or attorney’s fee. It pays for the preparation of the mound of documents that have to be prepared and is usually a flat rate, but can also be charged as a percentage of the loan amount usually less than 1 percent.

Processing fee

This is the fee the lender charges to cover initial costs for processing the loan. This includes the application fee and fees for accessing your credit report. These fees are usually around $400 to $550. Something to watch for when comparing lenders: Sometimes the credit report fee will be listed separately from the processing fee.

Appraisal fee

Because the lender wants to make sure the property is worth what you are paying for it, it requires an appraisal. An appraisal compares the value of the property to similar properties in the same neighborhood. These services are performed by independent appraisers and usually cost around $250 or more depending on the price of the property. For more information on Appraisals see our section on Appraisals.

Origination fee

In addition to the application or processing fee, the lender may also charge an origination fee. This covers the additional work it has to do when preparing your mortgage. The fee may be a flat fee or a percentage of the mortgage. If the fee is a percentage of the loan, then it is typically considered a “discount point” in disguise. This changes the tax implications and your costs, so be sure to ask the lender about this fee.